Excise on paper & paper products

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 November 2011 Dear Sir

I have a Printing and Punching unit. Currently I am buying coated paper from a company @ 10.3% excise Duty whereas Excise duty on uncoated paper is 5.15%.
If I get the coating job outsourced I need to pay service tax i.e 10.3% on job workers labour amount and excise on paper that is 5.15%. Now I am still in non-excise limit means below 150lacs.
Will this type of transaction create a problem with excise department

U S Sharma

U S Sharma (Expert)
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29 November 2011 coating of paper is dutiable activity, and job worker is liable to pay duty on total clearance value ( labour + materials both)

Querist : Anonymous

Querist : Anonymous (Querist)

29 November 2011 Dear Sir

What do you excatly mean by TOTAL CLEARANCE VALUE. Does that include the value of paper also in that?

Or is it with the material used for coating other than paper??

Just for information the job worker is charging me service tax on his labour i.e 10.3%

U S Sharma

U S Sharma (Expert)
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15 December 2011 for manufacturing goods the valuation rules are correct, however if the job worker is under 150 Lacs, then enjoy as the libility is below threshold limit and no duty payable.

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